Belén González Pardo

Working Papers

The Productivity Effects of Large Immigration Waves: Evidence from Spanish Regions

Working Paper, 2025

Abstract: This paper examines the dynamic and heterogeneous effects of immigration inflows on regional productivity in Spain between 2004 and 2022. Leveraging rich administrative data at the Autonomous Community (CCAA) level, I construct a shift-share instrumental variable that interacts historical immigrant settlement patterns with nationalorigin- specific inflows, allowing for plausibly exogenous variation in regional immigration exposure. To trace the time-path of immigration’s economic impact, I estimate impulse response functions using both panel and region-specific Local Projection IV (LP-IV) methods. The results reveal considerable variation in productivity responses across both sectors and regions. Labor-intensive sectors—such as agriculture, construction, and hospitality—experience significant and persistent productivity gains following immigration shocks. In contrast, capital- and skill-intensive sectors show more muted or even negative effects. Regional heterogeneity is closely linked to differences in absorptive capacity, institutional quality, and economic structure, with more dynamic and historically migrant-receiving regions exhibiting stronger gains. These findings highlight the need to align immigration policy with regional labor demands and institutional capacity. By accounting for temporal dynamics and structural heterogeneity, this work offers new evidence to inform targeted, productivity-enhancing migration strategies.

Keywords: Immigration, Regional Productivity, Shift-Share Instrument, Local Projections, Heterogeneous Effects

JEL Classification: J61, O15, R23, C26

Publications

Intangible assets of multinational enterprises in Ireland and their impact on euro area activity
ECB Occasional Paper Series, No. 350, 2024 (with M. Andersson, N. Blatnik, S. Byrne, L. Emter, V. Jarvis, M. Schmitz, N. Zorell, and C. Zwick).

SSRN link

Abstract: The activities of multinational enterprises (MNEs) have become an increasingly important feature of the euro area economy, affecting output, trade and financial linkages. MNEs contribute to domestic output by maintaining large production facilities, offering high-paid jobs, bringing in new technologies and generating tax revenues. Following statistical changes implemented in 2015 to better capture the increasing importance of intangible investment, the economic impact of MNE activities has become much more evident in measures of intellectual property product (IPP) investment and external IPP trade flows. MNE activities, which often entail large and instantaneous transfers of IPP, are frequently highly volatile and can blur real-time assessment – and forecasting – of the business cycle, the current account and the capital stock in the euro area. Focusing on Ireland, given the strong prevalence of MNE activities in that economy and their importance for the euro area aggregate, this paper assesses the usefulness of the “modified” series for Irish non-construction investment and services imports. Using the modified series would provide a more accurate picture of the domestic dynamics of the Irish economy and enhance real-time assessment of the euro area business cycle, current account and capital stock. This paper brings insights into the unwinding of IPP shocks, which is a more straightforward exercise than seeking to anticipate the shocks themselves. The conclusions of this work underline the urgent need for more granular and internationally harmonised data on MNE activities to gain a clearer understanding of the dynamics of IPP operations and the implications for both short and long-term macroeconomic developments.

Keywords: intangible capital, macroeconomic impact of globalisation, multinational firms

JEL Classification: E22, F23, F62

Articles / Policy Papers

Intangible assets of multinational enterprises in Ireland and their impact on euro area GDP
ECB Economic Bulletin, Issue 3, 2023 (with co-authors).
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This article discusses how intangible assets held by multinational enterprises in Ireland distort euro area GDP figures and explores implications for policy assessment.

Inflation developments in the euro area and the United States
ECB Economic Bulletin, Issue 8, 2022 (with co-authors).
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This article analyses post-COVID inflation dynamics in the euro area and the United States, highlighting similarities and differences in drivers, the role of energy shocks, and the implications for monetary policy.